WETHERSFIELD, November 21, 2013 - Connecticut’s unemployment rate declined by one-tenth of a percentage point sequentially in both October and September to 7.9% from 8.1% in August even as nonfarm payroll jobs in the state declined. Nonfarm employment was lower by 4,100 (-0.2%) in September but essentially flat (-100, -0.01%) in October as the federal government shutdown ended mid-month. The private sector actually added positions (+1,000) in October despite the slight overall nonfarm jobs decline. September and October job declines may have been impacted by a combination of uncertainty leading up to the federal shutdown and seasonal adjustment issues in public education (reported in local government). The unemployment rate is down five-tenths of a percentage point since October 2012 (8.4%) while nonfarm jobs have increased by 10,000 (0.6%) positions over the year.

Connecticut’s unemployment rate has not been below 8.0% since April 2009 (7.9%), and is down from the 9.4% level it reached during the August-December 2010 timeframe. This is the lowest unemployment rate for the state since the employment recovery began in February 2010.

“The September and October reports are sending mixed signals about Connecticut’s labor markets,” said Andy Condon, Director of the Office of Research. “The weeks leading up to the federal government shutdown, evidently, led to increased economic uncertainty and hiring indecision across the state. On a positive note, the state's unemployment rate has declined for two months in a row primarily driven by a reduced number of unemployed individuals.”

Preliminary October job estimates disclose a very small nonfarm employment decline, losing just 100 positions (-0.01%) to fall to a seasonally adjusted level of 1,650,700. All of the decline came from the government sector as the private sector jobs grew by 1,000 (0.1%). Connecticut has now added 10,000 total nonfarm jobs (0.6%) since October 2012. Private sector hiring has been more active over the year, adding 11,600 positions (0.8%).

Nonfarm Jobs: Connecticut’s seasonally adjusted nonfarm job growth year-to-date through October 2013 has reached 11,000 jobs (1,100 per month). This is slightly better than the 9,600 jobs pace through October of 2012 (960 per month). In 2011, the first ten months brought 10,400 jobs (1,040 per month) and in 2010, the year the employment recovery originated, the year-to-date October gain was also 10,400 (1,040 per month). Job growth during the first ten months of each year of the recovery has been modest but quite consistent in the state. Year-to-date net job growth from the private sector is 12,100 (1,210 per month).

Recession Recovery: Connecticut has now recovered 58,900 positions, or 48.6% of the 121,200 seasonally adjusted total nonfarm jobs that were lost in the state in the March 2008 - February 2010 employment recession. Connecticut’s jobs recovery is now 44 months old and is averaging approximately 1,339 jobs per month since February 2010. The private sector has recovered somewhat faster and has now recouped 66,900 (58.7%, 1,520 per month) of the 114,000 private jobs that were lost during the same period. Now at 1,650,700 nonfarm jobs in October, the state needs to reach the 1,713,000 level to arrive at a clear employment expansion. This will require an additional 62,300 jobs.

Labor Market Areas (LMAs): In October, five of the six major Connecticut Labor Market Areas (BLS recognized LMAs) posted job gains, while just one LMA had a decline. This was sort of a bounce back from an across the board decline in the major LMAs in the previous month (all six declined in September). The Hartford-West Hartford-East Hartford LMA (1,500, 0.3%) put up the biggest gain in magnitude while the Waterbury LMA (1,000, 1.6%) had the largest monthly percentage job increase. The New Haven LMA (600, 0.2%) also came through with smaller gains as did the Danbury LMA (200, 0.3%) and the Norwich-New London LMA (200, 0.2%). The Bridgeport-Stamford-Norwalk LMA (-900, -0.2%) was the only LMA to lose jobs in October. That area was heavily affected at the beginning of the month with a major commuter rail closure (Metro-North) that was eventually fixed ahead of schedule.

During September, all of the six major Connecticut LMAs declined. Most of the LMA declines were fairly small in September, except in Waterbury LMA (-1,000, -1.6%). Waterbury, subsequently, bounced back the same amount in October (1,000).
(Note: The major Connecticut LMAs are estimated and seasonally adjusted independently from the statewide numbers by the BLS and cover about 90% of the nonfarm employment in the state, so they will not sum to the statewide total.)

Hours and Earnings: The private sector workweek, not seasonally adjusted, averaged 33.6 hours in October 2013, down four-tenths of an hour from the revised October 2012 figure (34.0, -1.2%). Average hourly earnings at $27.71, not seasonally adjusted, were down 21 cents, or -0.8% from the October 2012 hourly private sector pay estimate. The resulting average private sector weekly pay was calculated at $931.06, down $18.22, or -1.9% over the year. The year-to-year change in the Consumer Price Index for All Urban Consumers (CPI-U, U.S. City Average) in October 2013 was 1.0%. Information for the manufacturing production workweek and earnings can be found in the table section of this release under the “Hours and Earnings” data category.

October’s flat performance was reflected in the industry supersector mix, as five industry supersectors posted gains and five exhibited declines.  The largest job gain came from the education and health services supersector (1,400, 0.4%).  Education (1,100, 1.7%) and health services (300, 0.1%) both contributed to the increase.  The related construction and mining (600, 1.1%) industry supersector continued to add jobs this October and remains strong over the year (5,500, 10.8%).  The leisure and hospitality (500, 0.3%) supersector was higher in October after a large drop in September.  A warm and hurricane-free October seemed to help the end of the tourist season after a decline in September.  The financial activities (200, 0.2%) and the information supersectors (100, 0.3%) posted small monthly gains as well.

Once again government (-1,100, -0.5%) led October’s declining industry supersectors.  Local government          (-1,000, -0.7%) had the biggest monthly decline and state government (-100, -0.1%) also exhibited a small drop.  Federal government employment levels were unchanged as furloughed federal workers were eventually paid and therefore counted as working.  Trade, transportation, and utilities lost jobs (-800, -0.3%).  Retail trade (-1,100,   -0.6%) brought the overall supersector down, although wholesale trade (100, 0.2%) and transportation and utilities (200, 0.4%) were positive.  The professional and business services (-600, -0.3%) supersector was also lower this month with all of the job loss coming from administration and support services (-900, -1.0%).  The other services (-300, -0.5%) and the manufacturing supersector (-100, -0.1 %) were slightly lower in October.  The heavily defense-related manufacturing sector, especially durable goods production, was less impacted from the federal shutdown than expected as the U.S. Defense Department rescinded contractor furloughs early on in October.

The September 2013 revised employment statistics pointed to a larger monthly job decline of -4,100 (-0.2%).  Seven of ten major industry supersectors declined statewide in September, with large job losses coming from leisure and hospitality (-1,800, -1.2%), financial activities (-1,300, -1.0%), professional and business services (-1,100, -0.5%), and manufacturing (-800, -0.5%).  The government (1,400, 0.6%) supersector added jobs in September in the state, the month before the shutdown.  At the regional level, all six major labor markets in the state experienced seasonally adjusted declines.  The high proportion of major industry supersector declines statewide (seven of ten) coupled with the predominance of regional labor market declines in September, point to increased hiring uncertainty and a drop in confidence as October 1^st (when the federal shutdown began) approached.

The October 2013 average weekly initial unemployment claims for first-time Connecticut filers (seasonally adjusted) increased over the month by 477 claims (11.0%) to 4,801, but were still lower by 75 claims (-1.5%) from last October (4,876). September 2013 average weekly initial claims measured 4,324, down 131 claims (-2.9%) from the August 2013 level (4,455) and down 343 claims (-7.3%) from September 2012 (4,667).

The nonfarm employment estimate, derived from a survey of businesses, is a measure of jobs in the state; the unemployment rate, based on a household survey, is a measure of the work status of people who live in Connecticut. Overall, as the national and state economies recover, volatility in monthly numbers can be expected. Additionally, changes in methodology that culminated in March 2011 with the U.S. Department of Labor, Bureau of Labor Statistics assuming complete responsibility for estimating all states’ monthly nonfarm job counts, have contributed to the month-to-month variability in the numbers. Jobs estimates are best understood in the context of their movement over several months rather than observed changes in a single month’s estimate.